20180220-辉立证券-Tisco_Financial_Group_Back_to_organic_growth_11页_398kb
报告摘要
Tisco Financial Group Summary
Core Content
Tisco Financial Group, also known as TISCO, is a Thai financial institution primarily engaged in banking services. Its core business is TISCO Bank, which operates in retail and SME lending, corporate lending, retail deposit, private banking, Bancassurance, cash management, and custodian services. The company has been undergoing a period of contraction in its hire purchase loans, but management anticipates a return to organic growth in FY18 due to reduced contraction rates and planned branch expansion through the 'Somwang' channel.
Main Points
- Loan Growth: TISCO's loan book grew by 10.7% in FY17, but this was largely due to a loan transfer from SCBT. In 3QFY17, its YTD loan book dropped by 4.3%, continuing a contraction trend since FY14.
- Loan-Loss Provisioning: TISCO is expected to reduce loan-loss provisioning in FY18 due to high excess reserves and improved NPLs. Its NPL coverage ratio is at 196%, the highest in the banking sector, and its NPL ratio is 2.3%.
- Profit Outlook: The FY18 profit view remains unchanged at Bt6.9bn, a 13.5% increase year-over-year. TISCO is also expected to increase its dividend to Bt4.75/share from Bt4.25/share in FY17.
- Rating: The 'ACCUMULATE' rating is maintained for TISCO, with a target price of Bt96/share, representing a 12.89% increase from the current closing price of Bt89.25.
- Valuation Metrics: The P/B ratio for FY18 is 2.0x. The company has shown a declining P/E ratio over the years, from 14.3x in FY16 to 10.3x in FY18, with a projected P/E of 9.5x in FY19.
- Dividend Yield: The dividend yield is expected to rise from 3.9% in FY16 to 5.8% in FY19.
- ROE and ROA: ROE is projected to increase from 15.91% in FY16 to 17.72% in FY19, while ROA is expected to rise from 1.71% to 2.29%.
- Debt/Equity Ratio: The ratio has decreased from 8.73 in FY16 to 7.72 in FY19, indicating improved financial leverage.
Key Financials
| FYE Dec | FY16 | FY17 | FY18E | FY19E |
|---|---|---|---|---|
| Revenue (Btmn) | 17,060 | 19,305 | 20,864 | 22,219 |
| Net Profit (Btmn) | 5,005 | 6,090 | 6,912 | 7,488 |
| EPS (Bt) | 6.25 | 7.61 | 8.63 | 9.35 |
| P/E (X) | 14.3 | 11.7 | 10.3 | 9.5 |
| BVPS (Bt) | 38.96 | 43.22 | 47.81 | 52.64 |
| P/B (X) | 2.3 | 2.1 | 1.9 | 1.7 |
| DPS (Bt) | 3.50 | 4.25 | 4.75 | 5.20 |
| Dividend Yield (%) | 3.9 | 4.8 | 5.3 | 5.8 |
| ROE (%) | 15.91 | 16.65 | 17.14 | 17.72 |
| Debt/Equity (X) | 8.73 | 8.11 | 7.72 | 7.72 |
Key Developments
- 2014: Entered the microfinance segment under the "Somwang" brand operated by Hi-Way, Co., Ltd.
- 2013: Developed a capital management plan and proposed the dividend payout and issued warrants for TSR.
- 2012: Collaborated with Deutsche Bank to establish "Deutsche TISCO Investment Advisory Company Limited".
- 2011: Launched TISCO Wealth offering one-stop investment advisory services.
- 2009: Expanded retail banking business under TISCO Leasing Co., Ltd. to offer used car loans and auto cash services.
Risk Factors
- Credit Risk: Risk associated with the creditworthiness of borrowers.
- Interest Rate Risk: Risk due to changes in interest rates affecting net interest income.
- Economic Risk: Risk from economic downturns impacting loan demand and repayment.
Peer Comparison (as of 20 February 2018)
| Company Name | Mkt Cap. (Btmn) | P/E (X) | P/BV (X) | Div Yield (%) |
|---|---|---|---|---|
| TISCO TB | 71,458 | 11.7 | 2.1 | 3.9 |
| TCAP TB | 65,829 | 9.4 | 1.0 | 3.7 |
| KKP TB | 69,434 | 12.1 | 1.7 | 7.3 |
Corporate Governance
- Score Range: The survey results of the Thai Institute of Directors Association (IOD) are categorized by score ranges: <50%, 50-59%, 60-69%, 70-79%, 80-89%, 90-100%.
- Companies Participating in Thai CAC: Declared and Certified companies are listed, with TISCO being certified.
- Non-Participation: A list of companies not participating in the Thai CAC program is also provided.
Business Description
TISCO is a holding company of the TISCO Group, with TISCO Bank as its core business. The company offers a wide range of financial services including retail and SME lending, corporate lending, retail deposits, private banking, Bancassurance, cash management, and custodian services.
Revenue and Loan Breakdown (as of 31 December 2017)
- Revenue Breakdown: The company's revenue sources include net interest income, net fee income, and other non-interest income.
- Loan Breakdown: The loan portfolio includes various segments, with a focus on retail and corporate lending.
Conclusion
Tisco Financial Group is poised for a recovery in its loan growth and is expected to maintain its 'ACCUMULATE' rating due to its strong NPL coverage and potential for higher dividend yields. The company's financial performance has shown consistent improvement, with increasing ROE and decreasing debt-to-equity ratio. TISCO's strategic initiatives and diversification into microfinance and investment advisory services are expected to support its growth in the coming years.
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